Dramatic Decline In U.S. Exports
In the coming reports, we should see a continued dramatic increase in the non-oil deficit combined with a similar dramatic decline in the petroleum deficit. What this implies is that in the headline volume statistics, foreign trade will be a significant drag on the economy as these statistics ignore the terms of trade factor. Properly measured, which is to say terms of trade adjusted, the effect will be moore neutral. But as foreign trade is usually expected to be a positive during downturns, the fact that it isn't now is still a drag.